Inventory glossary

What is Backorder rate?

Backorder rate is the share of customer orders (or order lines) that cannot be filled from stock on hand and have to wait for new inventory to arrive.

A high backorder rate tells you that reordering is happening too late or in quantities too small for real demand. For a small Shopify store it is an early warning sign, before customers start cancelling orders or leaving bad reviews because an item is stuck on backorder for weeks.

Track it by product or variant, not just storewide. One SKU with a long lead time can drag the whole number down while the rest of your catalog is fine. If the rate climbs for a specific item, that is a signal to raise its reorder point or order earlier.

Formula

Backorder rate = Number of backordered orders (or lines) / Total number of orders (or lines) x 100

Example

A candle store receives 400 orders in a month. 20 of those orders include at least one candle scent that was out of stock and had to be backordered. Backorder rate = 20 / 400 x 100 = 5 percent.

Common mistakes

  • Counting only full orders backordered and ignoring partial backorders within multi-item orders.
  • Measuring it once a year instead of monthly, which hides seasonal spikes.
  • Not separating the rate by SKU, so one chronic problem item is masked by good performers.

Backorder rate and SteadyShelf

SteadyShelf forecasts demand per variant and flags an order-by date per SKU, which helps you reorder before stock runs out and reduces how often items end up on backorder.

SteadyShelf is launching on the Shopify App Store. Join early access to get the install link first.

Related terms

Backorder · Stockout · Fill rate · Lost sales · Reorder point

Full inventory glossary

FAQ

Is a backorder rate of zero always a good sign?

Not necessarily. A zero backorder rate can mean you are carrying too much safety stock across the board, which ties up cash. The goal is a low rate reached through good timing, not through overstocking everything.

How is backorder rate different from stockout rate?

Stockout rate measures how often an item has zero stock at a point in time. Backorder rate measures how many orders were actually affected by that lack of stock. A store can have stockouts with no backorders if it simply stops selling the item until restock.

Let SteadyShelf do this math for every SKU

Order-by dates per supplier, seasonal forecasts and draft POs for your Shopify store. $29/month after a 30-day free trial.

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